R v DOUGLASS

THE OFFENCE

1. Between July 2010 and September 2017, the offender regularly misappropriated funds from the victims by keeping some of the money received from the victims for payment of BAS payments on behalf of the company. Instead of forwarding the full amount to the ATO as required, he reduced the figures on the BAS and paid less than the full amount to the ATO. The offender did this on a consistent basis. This placed the company in increasing debt over time without the victims' knowledge.
2. Between July 2010 and September 2017, the victims' company made the following BAS payments to the offender.

• 61 payments to the CBA account totalling $1,231,650.53
• 67 payments to the BCUS1 account totalling $424,904
• 13 payments to the BCUS1.1 account totalling $163,717.37.

1. Between the three accounts there were a total of 141 payments totalling $1,820,271.90.
2. Between July 2010 and September 2017 the offender made the following payments on behalf of the company to the ATO:

• 20 payments from the CBA account totalling $168,706.
• 3 payments from the BCUS1 account totalling $16, 939
• 33 payments from the BCUS1.1 account totalling $296,446.92
• 2 payments from his personal Greater Building Society account totalling $19, 095.01
• An unknown number of payments totalling $229,118.80.

1. The total amount paid by the offender on behalf of Arc Attack Engineering was accordingly $730,305.73.
2. In the period between July 2010 and September 2017, the offender fraudulently took a total of $1,089,966.17 from the victims' BAS payments that were entrusted to him to be forwarded to the ATO on behalf of the company.

OTHER EVENTS

1. In 2015, the company was audited by the ATO. They audited the offender's record of BAS payments which had been fraudulently adjusted by the offender. The offender told the victims that the ATO was threatening to liquidate them due to outstanding debts but did not inform them that it was related to his failure to pay the ATO the full amount of the BAS payments.
2. The offender said the ATO has issued a $60,000 fine and that there was a $108,000 debt. Sheenah Whitten transferred $60,000 from the company account into the offender's trading account so that the offender could pay off the fine. The offender told Sheenah Whitten that he had negotiated a payment plan for the debt.
3. In June/July 2017, the offender again told Sheenah Whitten that the ATO were going to liquidate the company. He said he was going to try to adjust the terms so that they could trade out of it. By late August 2017 he advised the victims that there was no choice besides voluntary liquidation of the company.
4. On 26 August 2017, the offender brought in a Sydney firm of administrators, Cor Cordis, who agreed with the offender that the only option was voluntary liquidation. The victims assumed that all BAS payments were up to date and that the liquidation was due to other company debts as previously represented by the offender.
5. On 29 August 2017, Cor Cordis had administration of the company.
6. In September 2017, the victims developed a suspicion that something was not right, and asked Cor Cordis to look into the offender as they did not trust him. Warren Whitten asked Cor Cordis for the company's ATO statement. The victims then discovered on the ATO business portal that the monies they had transferred into the offender's account did not match the amounts paid to the ATO. This was the first time the victims realised that the offender had been engaging in fraudulent activity. The victims alerted Cor Cordis to what they had uncovered. Meanwhile, they had also been contacted by a financial advocacy group, SR Group.
7. At 4.21 on 15 September 2017, the offender emailed Jason Tang of Cor Cordis and Sheenah Whitten. The email stated: "Jason. I am sending this email so that you have written evidence of the facts. I have had a gambling addiction for some time, have tried to cease but failed and am finished with living with a lie. Warren wanted to go with SR Group from the start regarding action that had resulted due to this admission. I recommended that he go into voluntary administration knowing that action would uncover my wrongdoings. If I could press rewind to elude this cancer that is called a gambling addiction this company should be handed back to Warren and Sheenah and the ATO debt be reduced or remitted to a level that the circumstances permit. I wish to make any admissions or do any actions that are required to obtain this end and bring about my punishment under the law. Please note that the amount of $145,129 paid off the integrated client account and $86,368 in GST and PAYG are withholding tax paid by me is correct per my records and the ATO integrated client money balance record 1 July 2015 (includes $40,000 paid by me in July 2015). Stephen Douglass".
8. On 18 September 2017, the victims went to Sydney for a meeting with Cor Cordis where the offender and a lawyer from SR were also present. During the meeting the offender confessed that he had stolen from the victims the whole time by incorrectly lodging PAYG and BAS payments.
9. On 19 September 2017 the victims reported the matter to Coffs Harbour Police Station.
10. The company was liquidated and the victims were a further $90,000 out-of-pocket due to losses from the liquidation.

ARREST AND ERISP

1. On 19 October 2017, the accused was arrested and conveyed to Coffs Harbour Police Station. He participated in an interview during which he made full admissions to having stolen money from the victims for a considerable time and having adjusted the BAS that he lodged with the ATO. He did not know the full amount that he had taken from the victims.
2. He also stated the following in his ERISP:
3. He had a long standing gambling addiction which was the motivation for committing the offence.
4. The liquidation was "totally my fault, nothing to do with the company as to why they were in that detrimental trading situation, and I thought by falling on my own sword, so to speak, that would help compensate them to a degree and - and get them to save the company by making those admissions." "If I could press rewind to elude this cancer that is called gambling addiction I would. Arc Attack Engineering is a solid well performing business and Warren and Sheenah are hardworking and successful business people. The only reason the company was forced into voluntary administration was through my gambling addiction".
5. In relation to the offending: "And if it got to a stage where I thought that one last bet would do it and then I just corrected a business activity statement to give me a little bit of extra time not to not pay the total amount, but to give me that extra bit of time to accumulate the cash to have that - you know that saving bet which never eventuated and that's how - that's how the spiral started."
6. When asked how he got money to fund his betting he answered "...the clerk ...give me money to cover, they, they do their VAS statements themselves...and then they put their money into, what I had was a clearing account for the amount that was paid to the ATO and you've got a certain period of grace before you've got to pay it and what I used to do was, was alter some of those, the sales and purchases because to reduce the amount payable just until I got that win and then I was going to put amended returns in and everything square up but it never works it never it um you never get back to, to getting those, that winning situation.
7. The single count in respect of which the offender is to be sentenced in fact represents a period of more than seven years' offending, and on the basis that BAS returns are provided every three months, effectively, if you fail to return the proper amount each time, four offences per year. He has had the benefit of the Crown rolling-up all of the relevant charges into a single count in relation to which there is only the single maximum penalty of ten years available rather than what might have been approximately 28 charges, all of which would have had available to them a potential sentence of ten years' imprisonment. In the circumstances, I regard that as a more than reasonable course taken by the Crown to the benefit of the offender.
8. The persons that he deceived by his deception that he would pay the correct BAS to the Tax Department were, as I understand it from the evidence before me, his friends. He was their trusted, personal and business accountant for a significant period of time. He clearly breached that trust on a regular and continuing basis for years. The amount of money was in excess of $1,000,000 and almost $1.1 million. The offending was systematic, frequent and planned. In my view, there must have been considerable impact on the victims, although there is no Victim Impact Statement in relation to a matter such as this. They were eventually forced to repay to the Tax Department the amounts represented by the understatement that the BAS owed. The business was fined $60,000 which was paid by the business so that it could continue trading.
9. It is not difficult to understand the high degree of stress which must inevitably have been caused to the offender's friends by the financial position that he placed the company in, when it otherwise appeared to be a successful and significant business. I note from my personal observation that it was clearly not some small business, as is indicated by the BAS returns that should have been made, but in addition that it appears to have been responsible for significant construction works around Coffs Harbour, including a suspended steel viewing platform on the mountain above Coffs Harbour, which is a very substantial and well-engineered structure. However, that is an aside, as I happened to notice it when I was on circuit, because I visited it.
10. The Whittens had created their successful business over a considerable period of time, being, as I understand it, approximately 20 years. Their reputations were no doubt damaged by the course of the company going into liquidation, which almost inevitably leads to not all creditors being paid and much of the funds of the company being used in the liquidation process.
11. The offender, in the material before the Court and in his evidence on sentence, in my appreciation, appeared to try and deflect some of the responsibility by saying that he had informed the victims that they could in fact pay their BAS payments directly to the ATO without the money going through his account. This was being advanced as it were in my view as an assertion that it was not in fact his entire fault for taking advantage of the system that he had put in place.
12. Over the time and up to the end he used his level of expertise to manipulate the BAS records and to ensure that his conduct would go undetected. In R v Pantano (1990) 49 A Crim R 328, Wood J said at 330: "It is impossible to be unmindful of the difficulty of detecting sophisticated forms of the kind here involved, or of the possibility for substantial financial loss by the public. Executives and trusted employees who give way to temptation cannot pass the blame to lax security on the part of management."
13. As I said, it was the offender who established the system of payments which was to his criminal benefit. Even at the death knell when the company was in serious problems, the offender was endeavouring to still disguise what he had done until, in my view, such time as it became absolutely inevitable that his offending conduct would be discovered, when he then decided that he would finally confess to his criminal conduct.
14. In my view, the offender's conduct over the years was an egregious form of criminal misconduct in the circumstances of this matter, and I accept the Crown's submission that in terms of objective seriousness it must be regarded as falling above the midrange of objective seriousness.
15. I note that s 192E does not have any monetary limitation. It covers fraud by way of causing a financial disadvantage by deception or dishonesty in any amount of money, that is, it covers offences significantly in excess of the monies involved here. It is for that reason alone that in my view this matter can only be said to fall above the midrange and not in a higher range.
16. There are a number of relevant aggravating features arising from the offender's conduct:

21A(2)(g)

1. The injury, emotional harm, loss or damage caused by the offender is substantial.
2. I accept the sum of money is substantial, and I accept, even in the absence of specific evidence, that the emotional harm to Mr and Mrs Whitten in the circumstances must have been significant.

Subsection (k)

1. The offender abused the position of trust to the victim and the community:

• The offender was a qualified accountant and as such in a special position of trust;
• He was also placed in a special position of trust with the ATO, which allowed him to negotiate with the ATO on behalf of the victims a payment plan for the incurred debt. That payment plan required the victims to pay a fine, and an additional sum to cover the debt incurred by the offender and further cover his offence. In my view, he breached his position of trust as a professional accountant not only to his clients but to the ATO.

Subsection (n)

1. The offence was part of a planned or organised criminal activity:

• The facts demonstrate systematic dishonesty, accompanied by planning, sophistication and repetition. The acts were not impulsive. It was not simply one electronic bank transfer, but a repetition. He manipulated in addition the BAS records before submitting them to the ATO, therefore the offender systematically planned and repeated his dishonest conduct for financial gain.

Subsection (m)

1. As I have previously referred to, this offence involved a significant series of criminal acts over seven years which formed part of a single course of continuing criminal conduct. In my view, the aggravating circumstance referred to in ss (m) also applies in this matter, as well as the factors I have already referred to.

SUBJECTIVE MATTERS I DRAW FROM THAT MATERIAL

1. The offender gave evidence on sentence. Called on his behalf was Mr Mark Ferguson, a retired solicitor. Tendered to the Court on behalf of the offender was a report from Patrick Sheehan, Psychologist, dated 26 March 2019 and a report from Vince Jensen, dated 7 March 2019, a gambling counsellor with Gambling Help.
2. Also tendered is a significant bundle of the offender's gambling records from sportsbet.com.au. They cover a period from 1 January 2013 through to 31 December 2017. I have perused sufficiently of the 619-odd pages to be able to say with confidence that it is patently obviously from those records that the offender was addicted to gambling. It appears that there was seldom a day that went past where he did not place a bet with Sportsbet and that invariably he placed multiple bets each day on a very wide variety of sports. It may be that he left out some, but I have not examined the full detail of the records.
3. I note that a lot of the bets were not simply in relation to horse-racing but in relation to all other forms of sports, betting on the outcome of particular games or tournaments, tennis, football in its various forms, golf and the like. It is an extraordinary record of betting, and although evidence has not been given from other material before me, it would appear that it is likely that he had other accounts such as with the tab that he might have utilised on Saturdays when he attended at the pub with his drinking and gambling friends.
4. As I have said, I have no hesitation in accepting that the offender was significantly addicted to gambling and prepared to bet on any international event in respect of which betting was possible. The records also do not appear to show that he had any significant success but in fact was, as one always anticipates in relation to persons addicted to gambling, overall a substantial loser.
5. In addition, before the Court is Exhibit D4, a letter, being a record of "Remand Addictions", and a letter of attendance in respect of that Corrective Services program. It indicates that on three days, being 14th, 15th and 18th of February 2019, he has attended five topics, being: 'Understanding Change", 'Urges and Cravings", "Problem Solving", "Balanced Living" and "Self Management Planning". He attended those sessions while at the Mid North Coast Correctional Centre after having been refused bail by me at the conclusion of the initial sentence hearing on 28 November 2019.
6. Also before the Court in relation to subjective matters is the offender's criminal history, which indicates that in 2012 he was before the Coffs Harbour Local Court for drive with a low range PCA and use unregistered registrable class "A" motor vehicle. In relation to the low range PCA, he received the benefit of a dismissal under s 10, and in relation to the unregistered registrable class "A" motor vehicle a s 10A conviction with no other penalty.
7. There was an offence dealt with at the Coffs Harbour Local Court on 20 February 2001 for failing to lodge an income tax return in respect of which he was convicted and fined $450. There is also an entry in relation to Newcastle District Court on 1 March 1991 for failing to furnish an income tax return, dealt with by Freeman DCJ, it was listed as a severity appeal but it was dismissed and a conviction confirmed with a fine of $700.
8. I do not regard any of the past offences as having any particular relevance in relation to the sentence to be imposed in respect of this matter, that is, they do not adversely affect it.
9. He is now approximately 66 years of age. Having been born and raised in Armidale to Australian parents, he is the second of six siblings. His father was a grazing station manager and they lived on the station. His father is described as a hard worker and that the family had a largely conventional family life. There were no familial issues with substance abuse, mental illness, domestic violence or criminality.
10. He was not exposed to any trauma in his childhood. He reported and gave evidence that his mother was a chronic gambler and that from the age of approximately 11 years he was enlisted to assist her with her gambling by being sent to the local phone box to place her bets to what I take was an SP bookmaker. Occasionally she rewarded him when she won; however, over the years his mother amassed a significant debt, and the offender and several of his siblings eventually took out loans in order to settle the debt and in the process kept the gambling and the debt a secret from their father. Apparently that crisis was sufficient to attenuate his mother's problematic gambling. I note that the sequence of events is something from which he ought to have learned but obviously did not.
11. He left home at the age of 18 to pursue employment and study, and he has lived independently since then. He has always maintained close links with his family members. His mother died when the offender was in his late thirties and his father died a few years after that. His siblings are said to be all well-adjusted and responsible people who are shocked and disappointed by his conduct.
12. There is said to be no evidence that any early developmental milestones were delayed. He attended mainstream schools in Armidale. He had no learning difficulties or behavioural problems and was a conscientious student. He was a prefect at Armidale High School and completed his Higher School Certificate with a good result, aged 18. He went on to study a Bachelor of Financial Administration at the University of New England, working fulltime as an accountant's clerk during his study, eventually obtaining his practising certificate in the years following his graduation.
13. He has worked as an accountant for several firms including one role that persisted for ten years. He underwent a period of six months unemployment in his early fifties as he endeavoured to establish his own business. He operated his own accountancy business over the following 15 years until being charged with this offence. As a result, he subsequently handed in his practising certificate, knowing that he would be deregistered.
14. He was in the intervening period between being charged and the sentence hearing in November 2018 supported on an aged pension. He is said to have no savings, superannuation or other assets due to his chronic gambling. While in custody he has been working in the textiles unit, and is said to be grateful for the distraction. He is said to have been well socially adjusted at school and heavily involved in playing rugby league well into adulthood with a broad circle of close friends who, according to him, continue to support him.
15. Mr Ferguson was indeed one such friend, although I note that from his evidence, Mr Ferguson has not appeared to have had significant contact with the offender for many years. I accept Mr Ferguson's evidence that the offender has expressed remorse and contrition to him and that he is deeply ashamed. They were at least at one stage close and Mr Ferguson had chosen the offender to be the best man at his wedding.
16. They had originally met as teenagers in the 'sixties at Guyra. He offered his continuing support, but I note that that will depend on his ability to visit Mr Douglass from time to time while in custody or thereafter, wherever he may then be. Mr Ferguson is now residing in Newcastle. As far as Mr Ferguson's evidence went, he did not appear to have had any significant level of contact with the offender since his marriage, that is, Mr Ferguson's marriage, until shortly before or just after his committal for sentence at the District Court.
17. The offender married at 22 years of age, and remained married for 16 years, there being four children ranging between now 34 and 40 years of age. However, while he has a close continuing relationship with his children who have visited him in custody, he separated from his wife after 16 years apparently because his gambling, which he had sought to hide from his wife, was causing financial strain and stress. His wife maintained custody of the children so eventually he moved to Coffs Harbour to be near them.
18. Since separating from his wife, he has had two further intimate relationships persisting for up to seven years; however his gambling addiction has been a problem in relation to any ongoing relationship. As a result, he has been single for the past five years. In the past, he has had a pattern of heavy drinking on weekends, consuming 10 to 15 schooners of beer on Saturdays at the pub with his friends, when he would also engage in gambling.
19. Having been exposed by his mother to gambling, he is said to have commenced attending the racetrack while at high school and betting on horses with his friends and placing multiple bets. His gambling is said to have increased steadily with his income, but he became an expert at hiding the level of his gambling from his friends. He informed the psychologist, Mr Sheehan, that he had begun gambling alone with the advent of online gambling.
20. He began chasing debt in his thirties, having exhausted his credit cards. Instead of inhibiting his gambling, his gambling escalated as a result of spurious belief that a series of wins would clear his debt. He had drawn down his superannuation and started using clients' money to gamble. Since being charged in respect of this matter, he has attended on Mr Jensen, whose report is before me.
21. I note that it explained the development of his gambling and consistent with his evidence before the Court there were potentially three matters that he called upon as being, in my view, justifications for his development of a gambling addiction.
22. I have already referred to the fact of his mother's gambling, which was the first of those matters.
23. He also gave evidence and reported to Mr Jensen that when he finally qualified for the Bachelor of Financial Administration he was provided with a credit card with a $20,000 limit. At that time he had a good paying job and was playing rugby league for which he was also paid. With access to the credit, his gambling increased until he found himself $20,000 in debt on the credit card.
24. In my view, there was the hint in his evidence that it was somehow the responsibility of the bank's for having providing him with a credit card that his gambling had escalated, and that he had gotten himself into debt which he chased.
25. He further said that after his separation from his wife, he was stressed and not seeing his children regularly, he was alone and lonely, and then mixing with his mates who gambled. He has indicated that the more he drank on Saturdays, the more he gambled, although as I have noted, the gambling records indicate that he had a daily problem which would not appear to be related to the consumption each day of alcohol.
26. He also reported that at the age of 45 he was making good money and the bank offered him a $60,000 line of credit which he took. He took the line of credit with the idea of gambling with the money held for his accounting clients before he needed to transfer it to the Australian Tax Office and then using the $60,000 as backup if he did not win.
27. In that way he could still be responsible to his clients and pay the ATO on time. However, he reported that he in fact lost the $60,000 over a three year period. He was at that time still looking for the "big win" and increasingly gambled in larger amounts, using the money held on behalf of his clients.
28. In Mr Jensen's report under the heading, "The Offence", he states, "For 17 years Stephen admitted to misappropriating funds by using money he held for his accounting clients, which was money that was to be forwarded to the ATO at a future date". The only information before me in relation to this offence is that it occurred over a seven year period. It is entirely probable that the reference by Mr Jensen to 17 years is a typographical error, although it would not be surprising if the offender, having been prepared to so deceive the Whittens, was not also prepared to deceive other clients in a similar manner.
29. However, I note there is no evidence of that, and I will sentence him on the basis of the facts that are before me, but I thought it necessary to point out what is potentially an error in the report.
30. I accept that he has expressed his acknowledgment of the pain and suffering he has caused by his actions and that he is remorseful as referred to by Mr Jensen, who also states that he has made no excuses and has taken responsibilities for his action to the best of his ability.
31. I note the submissions of Mr Curtis on behalf of the offender accept the aggravating circumstances in s 21A(2)(g),(k),(n). As to mitigating factors pursuant to s 21A(3), I accept that he does not have any significant record or record adverse to his interests in sentencing and can, in the sense of his criminal record, be regarded essentially as a person of good character. However, as I have noted during discussions, a continued offending over a seven year period runs counter to the extent to which he can be accepted as a person of good character. I accept he has no relevant criminal history and indeed must have been well regarded in the community, occupying the position of an accountant. Of course, the community at the time was not aware of what he was doing to Arc Attack Engineering and the Whittens.
32. I accept that there is evidence of remorse, and as previously indicated, I accept that he is entitled to a discount of 25% for the plea of guilty at the earliest opportunity, according to the case of Thomson and Houlton (2000) 49 NSWLR 383.
33. I accept that once it became inevitable that his criminal conduct would be discovered, he made relevant admissions and indeed did so before he had been charged, doing so in writing. I accept that that is an indication, in addition to what I have already said, that he is genuinely remorseful and contrite. I accept that he cooperated with the police in their investigation and made relevant admissions.
34. It is in this matter a tragedy that the offender did not learn from his mother's gambling problem that gambling was a dangerous course to embark on. He is clearly an intelligent man, having achieved professional qualifications and a responsible position as an accountant in the Coffs Harbour area. I accept that he continues to be supported by his children and that they will continue to support him.
35. There is no independent evidence before me as to any significant level of support in the Coffs Harbour area from persons who have previously dealt with him or to whom he is known, such as friends or acquaintances, whether they be gamblers or clients. I would however accept that up until the disclosure of this offending he would have been well regarded in the local community. There is no evidence that he continues to be so regarded. If I did not say it before, it was his prior good character and lack of previous convictions that no doubt allowed him to be placed in the position of trust that he abused.
36. I accept that he has made efforts to rehabilitate, having placed himself on the exclusion register from gambling places and cancelled his online betting accounts. I accept that he has received counselling from Mr Jensen. Gambling of course for him at present would be difficult as he is in custody, although it would not be unknown. In any event he does not appear to have any income to support gambling.
37. He has clearly had an addiction for a very lengthy period of time, whether his efforts at rehabilitation will sustain him when released from custody is in my view a moot question. I would accept that he at least has a reasonable prospect of rehabilitation and a low prospect of reoffending, in the circumstances where he is unlikely to be placed in a position of trust again and will be unable to work as an accountant. There are however many other positions of trust that do not require one to be an accountant.
38. While I accept that he has expressed genuine remorse and contrition, I also accept the Crown submission that it was in fact belated and only flowing on from the fact of realisation that his offending could be discovered.
39. It is not uncommon for fraud offenders to suffer from a gambling addiction, as has been pointed out in many cases. The Court in Johnston v R [2017] NSWCCA 53 extensively reviewed the authorities on the relevance of a gambling addiction. It has been consistently held that the fact offences were committed to feed a gambling addiction will not generally be a mitigating factor in sentence, referred to in Johnston at [36] and a significant number of other cases; that even when a gambling addiction is pathological it would be a rare case that an offender can seek mitigation of his or her penalty, Johnston v R at [36] citing Assi v R [2006] NSWCCA 257at [27].
40. A gambling addiction does not generally reduce an offender's moral culpability where the offence is committed over an extended period because the offender has had a degree of choice as to how to finance his/her addiction, Johnston v R at [38]. A gambling addiction will not often be connected to the commission of the offence but merely provide a motive or explanation for its commission, and is therefore only indirectly responsible for the offending conduct, Johnston at [38], quoting the Victorian Court of Appeal in R v Grossi (2008) 183 A Crim R 15 at [56]-[57].
41. In cases where general deterrence is important it is inappropriate to treat an underlying explanation that the motive was gambling as a mitigating circumstance or factor reducing moral culpability, particularly where the frauds are perpetrated and skilfully executed over an extended period, again Johnston at [38].
42. A gambling addiction may explain why an offender has committed an offence but it has been treated by the Courts in the same way as a drug addiction. In the guideline judgment of R v Henry (1999) 46 NSWLR 346 at [203] Spigelman CJ expressly rejected the proposition that an addiction to gambling is a matter in mitigation. Spigelman CJ and Wood CJ at CL stated that addiction (including drugs or gambling) is not of itself a mitigating circumstance. That passage was referred to also in Johnston v R.
43. However, I accept in this matter that the offender had a very significant addiction to gambling, and in my view, it is appropriate in those circumstances to provide some, although minimal, mitigation on sentence as a result, and I will do so.
44. It has been conceded by Mr Curtis on behalf of the offender that the section 5 threshold has clearly been passed, and that there is no alternative on sentence other than the imposition of a term of imprisonment. He has submitted that special circumstances should be found on the basis that the offender has good prospects of rehabilitation and when released would have a need for continued rehabilitation in the community.
45. I have considered that submission, as well as the submission made on behalf of the Crown, that the Court should be careful to ensure there is no double counting and that a finding of special circumstances does not necessarily result in the statutory relationship being altered, and that for special circumstances to exist there must be a significantly positive sign that shows that if there is to be a longer parole period, rehabilitation is likely to be successful and that is not a mere possibility, Tuuta [2014] NSWCCA 40 at 57. Efforts at reform and rehabilitation since the offending will also not generally be regarded as amounting to exceptional circumstances, R v Thompson (NSWCCA 4 April 1994, unreported).
46. I also note the comments of McClellan CJ at CL in Collier [2012] NSWCCA 213 at [36]
47. "...Many persons who are sentenced will receive a sentence of imprisonment for the first time. That fact alone is unlikely to justify a finding that the offender's circumstances are special."
48. The purpose in general of finding special circumstances is to allow for a more significant period of rehabilitation than would be available if the statutory relationship between the non-parole period and the balance of term were applied. That is particularly relevant where there is a significant sign of requirement for a longer period of supervision to assist in rehabilitation. However, as I have previously said, in my view the offender's prospects of rehabilitation are good or at least reasonable. He has already made efforts to cease his gambling addiction, and in my view in the circumstances of this matter, a variation of special circumstances is not warranted on the basis of this being either his first time in custody or a need for a longer period of rehabilitation than is otherwise applicable if the statutory relationship is applied. I do, however, intend to reduce the non-parole period simply as a matter of rounding down the non-parole period to provide for 18 months parole.
49. Mr Douglass, would you please stand. You are convicted and you are sentenced to a non-parole period of four years to commence on 28 November 2018, you will be first eligible for parole on 27 November 2022. The balance of term is one year and six months, giving a total sentence of five years and six months. That means that the total sentence or the balance of term will expire on 27 May 2024.
50. I have reduced the non-parole period, as I said, to round the parole period to one year and six months. If the statutory relationship had applied the non parole period would have been four years, one month and fifteen days. I have rounded it down by one month and fifteen days to provide for 18 months of parole.

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